Huawei “Open” to Supplying 5G Chips to Apple (Updated)

Posted on April 15, 2019 by Paul Thurrott in Apple, iOS with 4 Comments

Huawei founder and CEO Ren Zhengfei said this week that his firm is “open” to selling its 5G chips to Apple, which has been badly burned by its reliance on slow-moving Intel.

UPDATE: Huawei may be open to working with Apple, but the firm has since admitted that it has not yet discussed doing so with consumer electronics giant. —Paul

The revelation came as part of an interview with CNBC.

“When I look back at how Huawei developed in the telecom market, we actually made some missteps,” Mr. Ren admitted during the interview. “We set prices based on our costs, which were relatively low … [and] made it hard for Western companies to compete with us. We have reflected on this a lot. We have raised our prices, and now many people think Huawei is expensive. With higher prices, we have started earning more. But we will not distribute this extra money to our employees or shareholders. Instead, we will use it to fund universities and scientists for their research and explorations into the future. This way, we will be able to make world-leading products.”

When asked whether he would consider selling Huawei’s intellectual property to companies like Apple for the first time, Ren said yes.

“We are open to Apple in this regard,” he said.

“I think Mr. Jobs was a great man,” Mr. Ren said, referring to Apple’s co-founder and former CEO. “Apple is also a great company. It’s always pushed to make the market bigger, not smaller. With an umbrella, Apple sells at high prices and maintains high quality. It has grown the market, enabling many other companies to survive.”

Ren seems a bit obsessed with Mr. Jobs, frankly.

“Mr. Jobs was great not because he created Apple, but because he created an era, the mobile internet era. Saying that he was great is an understatement. I think he was super-great.”

Regardless, the overture from Huawei is nicely-timed, given Apple’s issues getting high-quality modems for its iPhones. Apple likes to play two suppliers against each other, but when it was using modems from both Qualcomm and Intel, it had to slow down the former’s so that every iPhone worked similarly. But thanks to Apple’s legal spat with Qualcomm, that company is no longer a supplier. And Intel’s 5G chipsets have slipped from late 2019 to late 2020.

Of course, a Huawei partnership would be problematic for Apple, too, given the U.S. government’s current stance on the firm and on China. So it’s possible that Apple would only be able to sell Huawei-powered iPhones outside of the U.S.

Then there’s the little issue of Huawei’s market dominance. Huawei overtook Apple as the world’s second-largest maker of smartphones last year and it is expected to become the world’s biggest smartphone maker in 2019 or 2020. It’s unclear whether Apple would want to partner with such a firm, though Apple does partner at times with Samsung, another technology giant with which it has had various legal issues.

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